UBS Macro Chart: US Employment Growth Almost Entirely Driven by Healthcare
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UBS highlights that recent US private-sector employment growth has been almost entirely driven by healthcare-related industries. Over the past three years, ex-healthcare private nonfarm payrolls averaged only about 6,000 new jobs per month; over the past two years, they averaged roughly minus 11,000. In contrast, healthcare employment averaged approximately 63,000 per month over the trailing 24 months.
Broadly defined to include hospitals, nursing care, and social assistance, healthcare accounts for only about 17.5% of the workforce yet has contributed nearly all net private job creation. UBS notes that this concentration is highly unusual outside of recessions. Historically, when the 24-month average contribution from ex-healthcare sectors turns negative, it has typically coincided with recessionary periods such as 1990–91, 2001, 2007–09, and 2020.
Apart from the pandemic, healthcare demonstrated counter-cyclical resilience during past downturns, continuing to expand even as other sectors contracted. The current environment differs markedly from a typical expansion, where such an extreme concentration of job growth in a single sector is rare. UBS suggests that aggregate payroll resilience may be overstating the underlying economic breadth, and weakness in ex-healthcare employment should be monitored as a potential signal of a broader economic slowdown.
Key exhibits
Exhibit 1
